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Theophilus Parsons.

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generally, that property in a ship should pass by a written instru-
ment. And as this principle seems to l|fi adopted by the statute, the
courts have sometimes almost denied the validity of a merely paro]
transfer. The weight of authority and of reason is, however,
undoubtedly in favor of the conclusion stated by Judge Story, thai
" the registry acts have not, in any degree, changed the common law
as to the manner of transferring this species of property." It would
follow, therefore, that such transfer would be valid, and would pass
the property.

In 1850, Congress, however, passed an act, " to provide for record-
ing the conveyances of vessels, and for other purposes." By this
statute it .was provided "that no bill of sale, mortgage, hypotheca-
tion, or conveyance of any vessel or part of any vessel of the United
States, shall be valid against any person other than the grantor or
mortgagor, his heirs and devisees, and persons having actual notice
thereof; unless such bill of sale, mortgage, hypothecation, or con-
veyance be recorded in the office of the collector of the customs
where such vessel is registered or enrolled." Then follows an ex-
ception in favor of liens by bottomry, and in subsequent sections
are provisions for recording by the collector, and giving certifi-
cates, <fec.



THE TRANSFER OP PROPERTY IN A SHIP. 315

This statute has no effect, that I perceive, upon oral transfers,
excepting that, as they cannot be recorded, their operation is
limited to the grantors and those who have actual notice. Where
the transfer is by bill of sale, the record of this, under the late
statute, is notice to all the world. But in most of our States there
are already provisions for the record of mortgages of personal
property, and the question arises how these are affected by this
statute of the United States. I should say that it controlled and
superseded the State statute, so as to make that unnecessary and
ineffectual ; and therefore a record in the custom-house only would
be sufficient, and a record under the State law would affect only
those who had actual knowledge of it.

As a ship is a chattel, a transfer of it should be accompanied by a
delivery of possession. Actual delivery is sometimes impossible
where a ship is at sea ; and the statute of 1850 makes the record
of the transfer equivalent to change of possession. If there be no
record, possession should be taken as soon as possible ; and prudence
would still require the same course in case of transfer by writing
and record.

By the word " ship," and still more by the phrase " ship and her
appurtenances," or " apparel," or " furniture," every thing would
pass which was distinctly connected with the ship, and is on board
of her, and fastened to her if that be usual, and needed for her
navigation or for her safety. Kentledge, a valuable kind of perma-
nent Ballast, has been held to pass with the ship ; so have a rudder
and cordage prepared for a vessel, but not yet attached to her, and
not quite finished ; and so would a boat, anchors, <fec., generally.
But the answer to the question, What is part of the ship ? must al-
ways depend somewhat upon the words of the instrument, and upon
the circumstances of the case and the intention of the parties.

A sale by the decree of any regular court of admiralty, with due
notice to all parties, and with proper precautions to protect the
interests of all, and to guard against fraud or precipitancy, would
undoubtedly be acknowledged by courts of admiralty of every other
nation as transferring the property effectually.



316 THE LAW OF SHIPPING.



SECTION IH



Two or more persons may become part-owners of a ship, in either
of three ways. They may build it together, or join in purchasing it,
or each may purchase his share independently of the others. lu
either case, their rights and obligations are the same.

If the register, or the instrument of transfer, or other equivalent
evidence, do not designate specific and unequal proportions, they
will be presumed to own the ship in equal shares.

Part-owners are not necessarily or usually partners. But a ship,
or any part of a ship, may constitute a part of the stock or capital of
a copartnership ; and then it will be governed, in all respects, by the
law of partnership.

A part-owner may at any time sell his share to whom he will.
But he cannot sell the share of any other part-owner, without his
authority. If he dies, his share goes to his representatives, and not
to the surviving part-owners.

A majority of the part-owners may, generally, manage and direct
the employment of the property at their discretion. But a court of
admiralty will interfere and do justice between them, and prevent
either of the part-owners from inflicting injury upon the others.

One part-owner may, in the absence of the rest, and without pro-
hibition from them, manage the ship, as for himself and for them.
And the contracts he enters into, in relation to the employment or
preservation of the ship, bind all the part-owners in favor of an
innocent third party.

In general, all the part-owners are liable, each one for the whole
amount, for all the repairs of a ship, or for necessaries actually sup-
plied to her, in good faith. If one pays his part of what is due, or
even more than his share, and it is agreed between him and the cred-
itor that he shall not be held further, still, if the others do not pay,
he must pay, unless there is a better consideration for the promise
not to call on him than his merely paying a part of what he was
legally bound to pay ; for where a man is bound to pay all, his pay-



PART-OWNERS. 317

ing a part is no consideration whatever for a promise to him. If he
had a discharge under seal, it might protect him at law, but would
not in admiralty, unless the circumstances of the case made this
just.

If it can be clearly shown, however, that especial credit was given,
and intended to be given, to one part-owner personally, to the exclu-
sion of the others, then the others cannot be holden. If the goods
were charged to " ship" so and so, or to " ship and owners," this
would tend strongly to show that it was intended to supply the goods
on the credit of all the owners. If charged to some one owner
alone, this would not absolutely prove that credit was intentionally
given to him exclusively. But it would raise a presumption to that
effect which could be rebutted only by showing that no other owner
was known ; or by some other evidence which disproved the inten-
tion of discharging the other part-owners.

So, if the note, negotiable or otherwise, of one part-owner were
taken in payment, if the promisor refused to pay, the others would
be liable, unless they could show a distinct bargain by which they
were exonerated.

Commonly, the " ship's husband," as the agent of all the owners for
the management of the ship has long been called, is one of the part-
owners. He may be appointed in writing or otherwise. His duties
are, in general, to provide for the complete equipment and repair of
the ship, and take care of her while in port ; to see that she is fur-
nished with all regular and proper papers ; to make proper con-
tracts for freight or passage, and collect the receipts and make the
disbursements proper on these accounts. For these things he has
.all the necessary powers. But he cannot, without special power,
insure for the rest, nor buy a cargo for them, nor borrow money,
nor give up their lien on the cargo for the freight, nor delegate his
authority.

Where he acts within his powers, a ship's husband binds all his.
principals, that is, all the part-owners. But a third party may deal
with him on his personal credit alone ; and if the part-owners, be-
lieving this, and authorized to believe it by any acts or words of the
third party, settle their accounts with the ship's husband accord-
ingly, this third party cannot now establish a claim against them to



318 THE LAW OF SHIPPING.

their detriment. If a ship's husband is not a part-owner, all the
part-owners are liable to him, each for the whole amount. If he is
a part-owner, each of the others is liable to him for his share of the
expense incurred. The " ship's husband " is called in the Statutes
of the United States the " managing owner."



SECTION IV.

THE T.TABTT.TTY OF MORTGAGEES.

A MOBTGAGEE of a ship, who is in possession, is, in general, liable
for supplies, repairs, &c., in the same way as an owner. But if he
has not taken possession, he is not liable for supplies or repairs
merely on the ground that his security is strengthened by whatever
preserves or increases the value of the vessel. Nor can he be made
liable, except by some act or words of his own, which show that
credit was properly given to him, or that he has come under a valid
engagement to assume this responsibility.



SECTION V.

THE CONTRACT OF BOTTOMRY.

BY this contract, a ship is hypothecated (which means pledged)
as security for money borrowed. The form of this contract varies
in different places, and, indeed, in the same place. Its essentials
are : First, that the ship itself is bound for the payment of the
money. Second, that the money is to be repaid only in case the ship
performs a certain voyage, and arrives at its destined termination
in safety ; or, as it is sometimes provided in modern bottomries,
in case that the ship is in safety on a certain day ; therefore, if the
ship is lost before the termination of the voyage or the expiration
of the period, no part of the money is due, or, as is sometimes said,
the whole debt is paid by the loss. As the lender thus consents that
the repayment of the money shall depend upon the safety of the



THE CONTKACT OF BOTTOMRY. 319

ship, he has a legal right to charge " marine interest," which means
as much more than legal interest as will serve to cover his risk.

The lender may require, and the borrower pay, this marine inter
est, which may be much more than lawful interest, on a bottomry
bond, without usury.

If the interest be not expressed in the contract, it will generally
be presumed to be meant and included in the sum named as princi-
pal.

If, by the contract, the lender takes more than legal interest, and
yet the money is to be paid to him whether the ship be lost or not,
this is not a contract of bottomry, and it is subject to all the conse-
quences of usury. But the lender may take security for his debt
and marine interest, additional to the ship itself, provided the
security is given, like the ship itself, to make the payment certain
when it becomes due by the safety of the ship, but is wholly avoided
if the ship be lost ; for then the lender takes the risk of losing the
whole, principal and interest, by the loss of the ship, and may there-
fore charge more than simple interest.

The most common contracts of bottomry are those entered into by
the master in a foreign port, where money is needed and cannot
otherwise be obtained. Therefore the security goes with the ship,
and the debt may be enforced, as soon as it is payable, against the
ship, wherever the ship may be. But in this country, these contracts
are frequently made by the owner himself, in the home port. And
sometimes they are nothing else than contrivances to get more than
legal interest. Thus, if A lends to B $20,000 on B's ship for one year,
at fifteen per cent interest, conditioned that, if the ship be lost, the
money shall not be paid, and the lender insures the ship for three
per cent, he gets twelve per cent interest, which may be much more
than the legal interest, and yet incurs no risk. If such a contract
were obviously and certainly merely colorable, and only a pretence
for getting usurious interest, the courts would probably set it
aside ; but it might be difficult to show this.

If the money is payable at the end of a certain voyage, and the
owner, or his servant the master of the ship, terminate the voyage
sooner, either honestly, from a change in their plan, or dishon-
estly, by intentional loss or wreck, the money becomes at once due.



320 THE LAW OF SHIPPING.

A bottomry bond made abroad would override all other liens or
engagements, except the claim for seamen's wages, and the lien of
material men for repairs and supplies indispensable to the safety of
the vessel. The reason is, that a bottomry bond is supposed to be
made from necessity, and to have provided the only means by which
the ship could be brought home. For the same reason r a later bond
is sustained as against an earlier, and the last against all before it.

The lien of bottomry depends in no degree on possession, for the
ship may go all over the world with the bottomry security attached
to her ; but the lender ought to collect the sum due, and so dis-
charge the bond as soon as he conveniently can; and therefore an
unreasonable delay in enforcing it will destroy the lien ; and any
connivance by the lender at any fraud on the part of the master
avoids the bond entirely.



SECTION VI.

THE EMPLOYMENT OF A SHIP BY THE OWNEB.

AN owner of a ship may employ it in carrying his own goods, or
those of another. He may carry the goods of others, while he him-
self retains the possession and direction of the ship ; or he may
lease his ship to others, to carry their goods. In the first case, he
carries the goods of others on freight ; in the second, he lets his ship
ly charter-party. We shall consider first the carriage of goods on
freight.

He may load his ship as far as he can with his own goods, and
then take the goods of others to fill the vacant space ; or he may
put up his ship as " a general ship," to go from one stated port to
another, and to carry the goods of all who offer.

It may be remarked, that the word " freight " is used in different
ways ; sometimes to designate the goods or cargo that is carried ;
sometimes to denote the money which the shipper of the goods pays
to the owner of the ship, for their transportation. Not unfrequently,
when the word is used in this latter sense, the word " money " is
added, and the phrase " freight-money " leaves no question as to what
is meant. Sometimes a ship-owner who lets the whole burden of his



THE EMPLOYMENT OF A SHIP BY THE OWNER. 321

ship to another is said to carry the shipper's goods on freight. But
the most common meaning of the word, especially in law proceed-
ings, is the money earned by a ship not chartered, for the transpor-
tation of the goods ; and in this sense we shall use it.

Nearly the whole law of freight grows out of the ancient and uni-
versal principle that the ship and the cargo have reciprocal duties
or obligations towards each other, and are reciprocally pledged to
each other for the performance of these duties. In other words, not
only is the owner of the ship bound to the owner of the cargo, as
soon as he receives it, to lade it properly on board, take care of it
while on board, carry it in safety (so far as the seaworthiness of the
ship is concerned) to its destined port, and there deliver it, all in a
proper way, but the ship itself is bound to the discharge of these
duties. That is to say, if, by reason of a failure in any of these par-
ticulars, the shipper of the goods is damnified, he may look to the
ship-owner for indemnity ; but he is not obliged to do so, because
he may proceed by proper process against the ship itself. This lien,
like that of bottomry, is not dependent upon possession, but will be
lost by delay, especially if the vessel passes into the hands of a pur-
chaser for value without notice. On the other hand, if the ship dis-
charges all its duties, the owner may look to the shipper for the pay-
ment of his freight; but is not obliged to do so, because he may
keep his hold upon the goods, and refuse to deliver them until the
freight is paid.

The party who sends the goods may or may not be the owner of
them. And he may send them either to one who is the owner, for
whom the sender bought them, or to one who is only the agent of the
owner. In either of these cases, the sender is called the consignor
of the goods, and the party to whom they are sent is called the con-
signee. The sending them is called the consigning or the consign-
ment of them ; but it is quite common to hear the goods themselves
called the consignment.

The rights and obligations of the ship-owner and the shipper are
stated generally in an instrument of which the origin is lost in its an-
tiquity, and which is now in universal use among commercial nations,
with little substantial variety of form. It is called the Bill of Lading.
It should contain the names of the consignor, of the consignee, of



322 THE LAW OF SHIPPING.

the vessel, of the master, of the place of departure, and of the place
of destination ; also the price of the freight, with primage and other
charges, if any there be, and either in the body of the bill or in the
margin, the marks and numbers of the things shipped, with sufficient
precision to designate and identify them.

It should be signed by the master of the ship, who, by the strict
maritime law, has no authority to sign a bill of lading until the
goods are actually on board. There is some relaxation of this rule
in practice ; but it should be avoided.

Usually one copy is retained by the master, and three copies are
given to the shipper ; one of them he usually retains, another he sends
to the consignee with the goods, and the other he sends to the con-
signee by some other conveyance.

The delivery of the goods promised in the bill is to the consignee,
or his assigns ; and the consignee may designate his assigns by
writing on the back of the bill, " Deliver the within-named goods to
A B," and signing this order ; or the consignee may indorse the bill
with his name only in blank, and any one who acquires an honest
title to the goods and to the bill may write over the signature an
order of delivery to himself. The consignee has this power, if such
be the usage, even if the word " assigns " be omitted. Such indorse-
ment not only gives the indorsee a right to demand the goods, but
makes him the owner of the goods.

As the bill of lading is evidence against the ship-owner as to the
reception of the goods, and their quantity and quality, it is common
to say " contents unknown," or " said to contain," &c. But without
any words of this kind, the bill of lading is not conclusive upon the
ship-owner in favor of the shipper, because he may show that its
statements were erroneous through fraud or mistake. But the ship-
owner, or master, is bound much more strongly by the words of the
bill of lading, in favor of a third party, who has bought the goods
for value and in good faith, on the credit of the bill of lading. In a
case which occurred in New York, the court said, that, as between
the shipper of the goods and the owner of the vessel, a bill of lading
may be explained or corrected as far as it is a receipt ; that is, as to
the quantity of the goods shipped, and the like ; but as between the
owner of the vessel and an assignee of the bill, for a valuable cousid-



THE EMPLOYMENT OF A SHIP ST THE OWNE3. 323

eration, paid on the strength of the bill of lading, it may not be
explained or corrected ; because the master, by signing the till,
authorizes the purchaser to believe the goods are what the bill says
they are.

The law-merchant gives to the ship, as we have seen, a lien on the
goods for the freight. The master cannot demand the freight with-
out a tender of the goods at the proper time, in. the proper way, to
the proper person, and in a proper condition ; but then the consignee
is not entitled to the goods without paying freight. The law gives
this lien, whether it be expressed or not. But it may be expressly
waived. The bill of lading, or other evidence, may show the agree-
ment of the parties that the goods should be delivered first, and the
freight not be payable until a certain time afterwards ; and such
an agreement is in general a waiver of the lien.

Nevertheless, if it seemed that the ship-owner did not intend to
give up his security on the goods, a court of admiralty would so
construe such an agreement as to give the consignee possession of
the goods, for a temporary purpose, as to ascertain their condition,
or, possibly, that he might offer them in the market, and by an
agreement to sell raise the means of paying the freight ; and yet
would preserve for the master his security upon the gooas for a
reasonable time, unless, in the mean time, they should actually
become, by sale, the property of a bond fide purchaser.

The contract of affreightment is entire ; therefore no freight is
earned unless the whole is earned, by carrying the goods quite to
the port of destination. If by wreck, or other cause, the trans-
portation is incomplete, no absolute right of freight grows out of it.
"We say no absolute right, because a conditional right of freight does
exist. To understand this, we must remember, that, as soon as the
ship receives the goods, it, on the one hand, comes under the
obligation of carrying them to their destination, and on the other,
at the same time or on breaking ground and beginning the voyage,
acquires the right of so carrying them. Therefore, if a wreck or
other interruption intervenes, the ship-owner has the right of trans-
snipping them, and sending them forward in the original ship, or
another ship, to the place of their original destination. When they
arrive there, he may claim the whole freight originally agreed on ;



324 THE LAW OP SHIPPING.

but if forwarded in the original ship, he can claim no more ; fof
then the extra cost of forwarding the goods is his loss. If the
master or owner of the ship forwards them in another ship from
necessity, and at an increased cost, the shipper must pay this in-
creased cost.

The ship-owner not only may, but must, send forward the goods,
at his own cost, if this can be done by means reasonably within his
reach. He is not, however, answerable for any delay thus occurring,
or for any damage from this delay. The shipper himself, by his
agent, may always reclaim all his goods, at any intermediate port
or place, on tendering all his freight ; because the master's right of
sending them forward is merely to earn his full freight. If, there-
fore, the goods are damaged and need care, and the master can
send them forward at some time within reasonable limits, and
insists upon his right to do so, the shipper can obtain possession of
his goods only by paying full freight. If, however, the master
tenders the goods there to the shipper, and the shipper there re-
ceives them, this is held to sever or divide the contract bj
agreement, and now what is called a freight pro rota itineris, or foi
that part of the voyage which is performed, is due. This is quite
a common transaction.

Difficult questions sometimes arise as to what is a reception of thk
goods by their owner. The rights of the master and of the shipper
are apparently opposed to each other, and neither must be pressed
too far. The master must not pretend to hold the goods for forward-
ing, to the detriment of the goods or their value, when he cannot
forward them, but merely uses this pretence to compel a payment
of full freight. And the shipper must not refuse to receive the
goods, when the master can do no more with them, and offers their
delivery in good faith.

If freight for a part of the voyage is payable, the question arises by
what rule of proportion shall it be measured. One is purely geograph-
ical, and was formerly much used ; that is, the whole freight would
pay for so many miles, and the freight for a part must pay for f;o
many less. Another is purely commercial. The whole freight being
a certain sum for the whole distance, what will it cost to bring the
goods to the place where they are received, and how much to take



THE EMPLOYMENT OF A SHIP BY THE OWNEB. 825

them thence to their original destination. Let the original freight
be divided into two parts proportional to these, and the first part is
the freight for the part of the voyage through which they were
carried, or, as it is called, the freight pro rata, and is to be paid by
the shipper who receives the goods. Neither of these, nor indeed
any other fixed and precise rule, is generally adopted in this
country. But both courts and merchants seek, by combining the
two, to ascertain what proportion of the increase of value expected
from the intended transportation has been actually conferred upon
the goods by actual partial transportation, and this is to be taken as
the freight that is due pro rata itineris.



Online LibraryTheophilus ParsonsLaws of business for all the states of the Union : with forms and directions for all transactions. And abstracts of the laws of all the states and territories on the various topics → online text (page 33 of 70)